KARACHI: The ship breaking industry is enjoying concessionary tax regime on re-melt-able iron scrap detrimental to commercial importers and manufacturers. The commercial importer, manufacturers also faces Import Policy Restriction and Regulatory Duty from which ship breakers are exempted.

These issues were raised in three different constitutional petition filed by Ghulam Ali Bhatia, Kashif Ayub and others filed through Navin Merchant Salim advocate and were heard on Tuesday by Customs Appellate bench of High Court of Sindh (SHC) comprising Justice Aqeel Ahmed Abbasi and Justice Mahmood A Khan.

Opening her arguments, she submitted that ship breakers were charged for Sales Tax upto 72 per cent and on remaining quantum of supply no tax was being charged from them. To a query by the bench she said that her clients are paying at the rate of 17 per cent. The re-melt-able iron scrap was taxed for some period and exempted for some times, she contended while placing on record a show cause issued to a ship breaker requiring of him to pay the tax. This never happened and ship breakers paid no tax, she argued further on ground that this show cause is still pending a decision before the relevant authority.

She maintained that ship breakers are taking advantage of two PCT headings to evade payment of revenue.

No one checks that what is being cleared under the garb of two different PCT heading and old scrap market of Shershah is filled with such items, Navin Merchant advocate told the court.

The commercial importer and manufacturer is badly hit by the discriminatory taxation in recent months and wants to stop such treatment in future, she argued explaining the reason for filing the petitions. She cited a number of judgments by the apex court and SHC.

To a query by the court she said that in other two petitions she has challenged the restriction under Import Policy Order and imposition of Regulatory Duty.

The bench after a detailed hearing spreading over more than hour treating the same as Part Heard, fixed Jan 29 for further hearing when the counsel for petitioner will be arguing the IPO restrictions and imposition of RD. The petitioner alleges extra favor to the ship breaking industry and maintains that due to difference in taxes on identical commodity, the commercial importers/manufacturers cannot compete in free market.